JPMorgan has released a report predicting a possible 20% drop in the Bitcoin network hash rate following the Bitcoin halving in April 2024.
“We estimate that up to 80 EH/s (or 20% of the network hashrate) could be removed during the next halving (April 24) as less efficient hardware is decommissioned,” the report said.
Expected significant drop in Bitcoin hash rate
The research report argues that the Bitcoin mining industry is in a “melting pot” ahead of the Bitcoin halving in April 2024.
The Bitcoin halving occurs every four years and involves a halving of Bitcoin miners’ rewards. The aim is to curb inflation and the fourth halving will take place in April 2024.
It goes on to say that the four-year block reward opportunity is approximately $20 billion. This prediction is based on the current price of Bitcoin. However, it highlights a significant decline of around 72% compared to just over two years ago:
“For comparison, this number peaked at around $73 billion in April 21 and has fluctuated between $14 billion and $25 billion over the past year.”
At the time of publication, the price of Bitcoin is $26,778.
Bitcoin price chart 1 month. Source: BeInCrypto
JPMorgan lists several Bitcoin mining companies but names Bitcoin mining company CleanSpark as its preferred option:
“We believe CLSK, our top choice, offers the best balance of size, growth potential, power costs and relative value.”
However, the investment firm notes that although Marathon Digital is the largest operator, it has the highest energy costs and lowest margins.
Bitcoin mining speculation before the halving
Marathon Digital provides an operational summary on its website and notes that the numbers are rough estimates. However, the company says it currently has around 155,910 operational miners worldwide.
Digital Marathon Operations Summary. Source: Marathon Digital
Meanwhile, Riot Platforms is believed to have relatively low power costs and liquidity.
Conversely, BeInCrypto recently reported that the four-year cycles may not be related to the Bitcoin halving, as is widely believed.
Citing recent online comments, “Pledditor,” a Bitcoin enthusiast, challenges popular assumptions.
“Bitcoin’s four-year cycles are just coincidences and have little to do with the halvings.”
Nevertheless, the upcoming halving has created excitement among Bitcoin mining companies.
On August 16, BeInCrypto reported that Bitcoin infrastructure company Blockstream is acquiring Bitcoin mining rigs in anticipation of the assets increasing in value after April 2024.
Disclaimer
In accordance with Trust Project guidelines, BeInCrypto is committed to unbiased and transparent reporting. The aim of this news article is to provide accurate and up-to-date information. However, readers are advised to independently verify the facts and consult a professional before making any decisions based on this content.
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